The biggest mistake most small business owners make

Photo by Tim Gouw
Reading Time: 4 minutes

What one small business owner learned about the importance of effective hiring systems

David Fuller

Bob was frustrated, stressed and upset. One of his key employees, Keith, had just left to start his own business and had taken another staff member with him.

I wasn’t surprised. I’d been working with Bob for several months and had met Keith several times. My impression wasn’t favourable, and I had discussed this with Bob.

However, Bob thought he needed Keith because he had lots of work and felt he would be short-staffed without him.

So did Bob make a mistake somewhere along the line in hiring Keith? What went wrong?

When we’re starting our business and we hire our first staff member, we often hire a friend or family member to help us keep up.

small business hiring
<strong>Photo by <a href=httpsunsplashcompunttimutm source=unsplashutm medium=referralutm content=creditCopyText>Tim Gouw<a><strong>

More advice on running your business

As we grow, we advertise in the newspaper, online or through a job agency.

When there’s a shortage of labour, we put warm bodies into positions to fill vacancies.

When there’s high unemployment, we go back and hire friends and family who desperately need jobs.

We rarely end up with ideal staff members.

It’s true that sometimes, in our businesses, we slow down the process and hire someone with the skill set we need. But this also doesn’t always work out. These people with the ideal skill sets often struggle in our companies and leave or get fired. Like Bob, we end up frustrated, stressed and upset with our employees and our businesses.

The root of the problem was not Bob or Keith. The biggest mistake most business owners make is that they don’t have a reliable system for hiring or evaluating their employees. This is a universal challenge for business owners.

When we fail to hire the right people, it costs us customers and, ultimately, tens of thousands of dollars in lost business.

So what do we need to do?

Fortune 500 companies use psychometric testing to help pick their employees. Psychometric testing might be Myers-Briggs, DISC behavioural analysis, job aptitude testing or some other test that measures whatever they deem important. The cost of this testing usually runs from $100 to $750 per job candidate.

These large organizations also have a documented system for hiring that includes multiple interviews, checking of references, and possibly a trial for a day or more.

Small businesses with fewer than 50 employees rarely do any of this. I know many a small company that doesn’t even check references.

To avoid challenges like Bob faced with Keith, we need to develop systems of hiring and monitoring our employees to ensure we have the right people. This starts long before the interview by working on the following four areas.

Core values

Identify the core values of your company. What do you stand for, and what are the types of people you want as company representatives, customers and suppliers?

When you have clarity on this, you’re well on your way to hiring the right type of people.

Roles and responsibilities

Many small businesses aren’t clear on who does what in the business. Without clear responsibilities, it’s difficult to train new employees to fit into the business, especially if they don’t understand their role and the roles of others in ensuring the company is successful.

Once you have a clear understanding of the type of person you want based on your values, you need to have clarity on the skill set required to fulfil that role.

Hiring

We need a system we follow every time to ensure we advertise and interview properly, check references and use our core values as criteria in making our decision.

Without a system, we make decisions randomly and end up with the same mediocre results we had in the past.

On-boarding process

I’ve talked to many employees who thought they were hired for their dream job but became frustrated and left. This is often the result of poor planning by leaders in the small business sector.

When we fail to have a system to properly bring people into our company, orientate them and give them feedback on their performance, we set them up for failure.

We think our employees will learn by osmosis, but the truth is that it takes a long time to bring new employees up to speed. When we fail to invest time in this matter, we create barriers to our success as a company.

Bob doesn’t make the same hiring mistakes he made in the past. He’s recently hired three more employees based on his core values. He’s extremely happy with the results. More importantly, Bob is excited about going to work again because his employees are enthusiastic about their employment. They’re not looking to start their own businesses or to go to another company.

Bob has created clarity around his employees’ roles and responsibilities. He’s working on developing an onboarding system that engages his new hires and enables him to evaluate them on a regular basis.

Bob’s small business might not be perfect yet, but he’s well on his way to reducing his stress and having a business that works for him.

Dave Fuller is a Commercial and Business Realtor, an award-winning business coach, and business author.

For interview requests, click here.


The opinions expressed by our columnists and contributors are theirs alone and do not inherently or expressly reflect the views of our publication.

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